Explaining Net Neutrality the Mutual Fund Way

There’s been no escaping the Net Neutrality debate over the past couple of weeks. It is being reported that TRAI has received close to 6 lakh emails from Indian net users that support Net Neutrality. How many of these emails are actually being acknowledged is anybody’s guess, but that’s beside the point. In a way, it doesn’t even matter if TRAI reads your email or not. The fact that it’s being reported that they’ve received so many of them is good enough for the argument to be heard. And being heard it is. The major e-commerce companies that were on the other side of the boat have now started to jump ship. A public backlash of sorts, the case for Net Neutrality cannot be left unheard.

Now, since a lot of people have tried to explain Net Neutrality in their own way, I thought I’d try to as well, taking the example of what we talk about here every day – mutual funds. SEBI has mandated the maximum fund management fees that mutual funds can charge, but what if it hadn’t. What if mutual fund investors were facing the kind of situation that net users are facing right now? What would happen if fund companies could charge you the way telecom companies want to charge data users?

Firstly, you’d have to pay a token fee just to be eligible to invest in mutual funds. Then, depending on the kind of fund you want to invest in – equity, debt or hybrid – you’d have to pay another designated amount to invest in them. Why did you pay the first amount then, you’d ask? Just because the fund companies were allowed to charge you for that as well.

So, you’re now paid two fees just to invest in a fund. But what if the fund has different types of charges for different investors based on their investment goals? So, suppose you want to invest for your child’s education, you’d have to pay a different fee as compared to someone else who wants to invest the same amount in the same fund for the same time period, but for a different goal like his or her retirement.

If this seems unfair, it is because it is unfair. And it could only get worse if a fund distributor would be allowed to take higher commissions for funds from one AMC and lower commissions for funds from other AMCs, which would be entirely at his discretion.

This is the kind of situation that has been threatening to crop up in the way we use the internet. Just the way it is for investing in mutual funds, there should be uniform blanket of charges to use the internet as well.

We, at Value Research, have always been in support of an even playing ground on the internet. Users shouldn’t have to pay different amounts to access different parts of the internet, which is exactly why all sections of our website are accessible to everyone for free. At the most, you’d have to create an account to access some of our research and analysis tools, but even creating that user account isn’t chargeable. So go ahead and send that email to TRAI, the way we use the internet is on the line.